Current Tenant month month advice?
Wholesaler · Miami, FL · Member since 2010 · 346 posts · 3 votes
Current Tenant month month advice?
Most Popular Reply
Real Estate Investor · Sacramento, CA · Member since 2008 · 566 posts · 356 votes
15yCongratulations, John.
This is just my 2 cents, here.
Don't start the relationship with your new tenants with a lie. Nuf said.
Second, I agree with Mitch. Bad idea to make the rent one amount, then discount for yard work. IMO, even worse to charge the higher amount and cut a check. Simply make the rent the lower amount and put the yardwork in the agreement as the responsibility of the tenant. Protect yourself, as Raymond pointed out, failure to shovel snow, keep the grass cut, etc. could come back on your, so have a clause that charges the tenant if they fail to keep things up.
The problem with cutting a check, is that the tenant becomes your service provider, or even worse, an employee. You don't want that. Better they just do it as required by the lease.
To be honest, what's the big deal about the rent? A seven year tenant that does the yard work. Count your blessings. I bought a 4 unit, booted one non-payer and was remodeling the vacant unit. The other three "saw the writing on the wall" and all bailed and I found myself with an empty four unit. Tenants get skittish when a new landlord shows up on their door. You don't mention a tenant in the lower floor. If it's vacant, I'd focus on filling that before making waves with the upper.
Good luck.
Ralph
18 Replies
- SFR Investor · Orange County, CA · Member since 2009 · 1k+ posts · 1k+ votes15y
Originally posted by John Whitmore:
Anyways one issue is I have a current tenant on the top floor who pays 625 a month. It is 725 but he gives him the garage and knocks off 100 a month if he does lawn work, shovels the driveway etc.I've been advised this is a bad approach. It's one thing to reimburse your tenant with a separate check for performing "chores" on your property, but don't knock it off the rent. If there is ever a problem with this tenant, he will show the court he's been paying $625 a month and you've been accepting it. That may make the $725/month on the lease irrelevant and any judgements/damages could be based on the $625.
- Wholesaler · Miami, FL · Member since 2010 · 346 posts · 3 votes15y
ok, thank you I plan to drive by the property once a week so I can see if the building looks maintained (snow, lawn cut) etc. and can make a seperate check to him. Now as far as approaching the tenant since he has been there for 7 years, I am sure he seems to pay on time but I don't want him paying me the 10th, I expect it on the first and will make it late on the 3rd, is that something that can potential piss him off and leave ? what is your experience ?
- SFR Investor · Orange County, CA · Member since 2009 · 1k+ posts · 1k+ votes15y
Originally posted by John Whitmore:
I expect it on the first and will make it late on the 3rd, is that something that can potential piss him off and leave ? what is your experience ?Sorry, I can't help there since I've never "inherited" a tenant. Some on here might recommend the strong arm approach, i.e., tell the tenant there's a new sheriff in town and this is how it's going to be. Some might say leave it the same, but if that doesn't work for you, it doesn't work.
You might try explaining to the tenant your financing on the property is different than the previous landlord and you have to pay the mortgage on such and such a date, so you have to move up the due/late date, etc. etc. But tell him you want to be reasonable and considerate and work out a mutual agreement. Perhaps you can find some middle ground, then every year move it a little closer to where you want it?
Tact and diplomacy are the keywords here. Best of luck and let us know what happens.
- Commercial Real Estate Broker · Memphis, TN · Member since 2010 · 151 posts · 82 votes15y
Having Tenants do work ultimately will cause a problem in some waybshape or form. It may be next week, month, or year but I will be a problem. If h is month to month, fine but let him know you will not renew his current lease and will be puttin him on your own month to month lease that will outline terms and conditions. Make one of these the payment date. He won't want the hassle of moving and the expense instead of paying you timely. Anywhere he moves will expect rent on the first anyway.
This is a perfect example of the tenant give a little take a mile theory.
- Investor · Southern CT, CT · Member since 2010 · 211 posts · 41 votes15y
One thing i would suggest. Evaluate how saturated your local market is with rentals and what the going rates are compared to use. Couple this with an analysis of how easy and quick it would be for this tenant to find another place, if he doesnt agree to your new terms. Are the other units vacant? Think about this systematically and don't make any abrupt decisions that will end up with a vacant unit and you paying months while you find a replacement..
- FL · Member since 2009 · 2k+ posts · 357 votes15y
I would also suggest that you find out what the laws are in Ct., concerning leases, grace periods for rent payments, late fees, eviction process, etc.
Be very careful with snow removal.
If I remember correctly, in Meriden, Ct., you have 24 hours to clear the sidewalks.
After the 24 hours, the city can have it cleared, and you get charged for that.How did you do with the bank and your credit report?
Also, didn't you have an approval from a credit union for the loan?
John, Best of luck.
Ray
- Wholesaler · Miami, FL · Member since 2010 · 346 posts · 3 votes15y
ok thank you I will check the laws, and I ended up going to liberty bank, and gave the lady my numbers she said I should be fine after I get this dispute filed with the credit bureau. She said she may set me up with a business loan too which can allow me to take out more money if I needed. I am getting the inspection on Monday so if everything goes well, I hope that I can be 22 with my first house in my portfolio. I truly believe the numbers are excellent on this deal. mortgage taxes and insurance will come to around 550-560 a month. the sewer water bill will tact on another 60-70 and the potential rent income would be 1250-1300. Also, with the tenant and landlord laws I will be asking my lawyer when I file the closing costs with him and have him go over my landlord tenant lease to see if it follows the laws.
- Professional · CA · Member since 2010 · 7 posts · 2 votes15y
Hi. I'm new to BP and have been reading some articles/forums with great interest.
I have been an apartment manager and a leasing manager in Los Angeles. This is the way I would approach as a suggestion.
I would approach the tenants and introducing myself as an assistant to the owner of sort where you are not letting them exactly know that you are the owner.
I would let them know that there is a new owner for the property and that there will be few changes. Then I would say that the new owner prefers having things done his/her way and that from now on, the due dates on all the tenants would change to the first of each month and that late fee would be due after 3rd. Give them a notice stating that all rent shall be due on the 1st (unless it is stated specifically in the lease that rent is not due til 15th and it is still in effect and not in month to month)
If the lease is month to month, then I would just give them a 30 day notice of change in tenancy and let them know that starting next month the rent will be due on the 1st and late after 3rd. If they do not pay by the due date, then it is ground for eviction. However, I would explain this nicely to the tenants during the introduction to let them know so that the notice would not be unexpected and they know what will happen if they pay late.
Technique I've used with previous tenants is that I made myself as just a messenger from the owner, which makes me not really the same thing as owner since i'm just a lowly servant. Then I approach them as if I'm trying to help them and that I'm just a guy trying to look out for the tenants. Of course I was the manager and had same view as the landlord but these tenants dont know that. It's all in the tone as well. Speak nicely to tenants and it will be easier to deal with them. If you become hostile toward them, then they could start not replying to your communication and making evictions/tenancies more difficult. They will become a nightmare tenants if you give them the opportunity. They can trash your place when they move out and you'll end up spending a lot of money to repair not to mention the rent lost due to vacancy.
Hope this helps in any way.
- Real Estate Investor · Elkhorn, WI · Member since 2008 · 453 posts · 104 votes15y
Originally posted by John Whitmore:
ok, thank you I plan to drive by the property once a week so I can see if the building looks maintained (snow, lawn cut) etc. and can make a seperate check to him. Now as far as approaching the tenant since he has been there for 7 years, I am sure he seems to pay on time but I don't want him paying me the 10th, I expect it on the first and will make it late on the 3rd, is that something that can potential piss him off and leave ? what is your experience ?Welcome to landlording!
Paying the renter or knocking off rent to do work is a terrible idea. It works great until he chops his foot off while mowing the lawn and you get a letter from his attorney to make a claim on your workmans' comp insurance.
Also, I suggest not telling them that you own the place...that you're just the property manager. Your boss is a high powered attorney in LA.
If the place is a low or middle income building, I suggest collecting the rent in person every month. This allows you access inside the units to make sure there is...
-no drug dealing
-no water issues
-no electrical issues
-no garbage laying around that the rats get intowell, you get the picture. If you're going to succeed in this business you should be a hands on landlord, or hire a property manager who cares just as much about your investment then you do.
Hang on, this will be a wild ride!
-Rich - Real Estate Investor · Sacramento, CA · Member since 2008 · 566 posts · 356 votes15y
Congratulations, John.
This is just my 2 cents, here.
Don't start the relationship with your new tenants with a lie. Nuf said.
Second, I agree with Mitch. Bad idea to make the rent one amount, then discount for yard work. IMO, even worse to charge the higher amount and cut a check. Simply make the rent the lower amount and put the yardwork in the agreement as the responsibility of the tenant. Protect yourself, as Raymond pointed out, failure to shovel snow, keep the grass cut, etc. could come back on your, so have a clause that charges the tenant if they fail to keep things up.
The problem with cutting a check, is that the tenant becomes your service provider, or even worse, an employee. You don't want that. Better they just do it as required by the lease.To be honest, what's the big deal about the rent? A seven year tenant that does the yard work. Count your blessings. I bought a 4 unit, booted one non-payer and was remodeling the vacant unit. The other three "saw the writing on the wall" and all bailed and I found myself with an empty four unit. Tenants get skittish when a new landlord shows up on their door. You don't mention a tenant in the lower floor. If it's vacant, I'd focus on filling that before making waves with the upper.
Good luck.
Ralph - Real Estate Investor · Elkhorn, WI · Member since 2008 · 453 posts · 104 votes15y
someone can be viewed as an employee if you cut them a check or give them a break on rent.
Just saying...be careful.
- Investor · Southern CT, CT · Member since 2010 · 211 posts · 41 votes15y
As a landlord you'll make mistakes; we we all try to do is mitigate those risks so our mistakes are not too costly. You'll be alright, just do he necessary research and continue to ask questions. i'm just switching over to buy/hold as well so i'm sure things will be coming up.
- Wholesaler · Miami, FL · Member since 2010 · 346 posts · 3 votes15y
ok yes, these are all great ideas that I haven't thought of and I apperciate every response. I will put maint. in the lease and not treat them like an employee. I will not lose on this house and fail at being a landlord. I am going to keep learning as this all can become a reality in the next 6 weeks. I have a good idea as to how many landlords fail already just by reading on here and what I see and although I don't have the experience I feel I will gain that and have a good amount of knowledge to keep the risk level lower
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes15y
1. I agree that you should NOT lie about who you are. If you need a lie to succeed as a Landlord, you're obviously in the wrong business.
2. Do not deduct anything from rent. Rent is rent. If you pay him for mowing the lawn, that's a separate transaction. If you reimburse him for fixing a leaky toilet, that's a separate transaction. Don't mix the two.
3. I would recommend you generate new contracts with the tenant. Explain that you've seen his payment history and try to find out why he pays so late in the month. He might have a legit reason, but odds are he probably paid late simply because he could. If you need payment by the 1st, let him know that, figure out how to make it work, and put it in writing. If you can wait until the 15th, make the due date the 15th and put it in writing. In other words, there's no point in playing hard-ball with a tenant that's got a good history of timely payments; you're only setting yourself up for a bad tenant/owner relationship or you'll lose a good tenant. Look for the win/win!
The DIY Landlord Book4.7248 Reviews - Real Estate Investor · Elkhorn, WI · Member since 2008 · 453 posts · 104 votes15y
the only relationship I want with my renters is one of business. They pay me money for a clean, safe place to rent...and I try to get them to do what they agree to do in the lease. That's it! I don't want to buy them flowers for Valentine's day, or beg them to stay for years in exchange for late rent and letting them slide on a few things. All the while they are trying to figure out how to hit the "landlord lottery" from some rich (appearing landlord).
I recommend treating the business as a business, not like give/take relationship or marriage.
- Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes15y
There should be a period for notice in the last lease that you are going to assume. It is usually 30 or 60 days. All you need to do is tell the tenant that you will not be changing his rent but rather just moving to your paperwork.
You dont have to tell him you have seen his payment history. All you need to do is tell him what you rules are when you sign a lease. You should tell him that is last landlord speaks highly of him and you look forward to a good relationship going forward.
As for the late on the third thing. I would make it due on the first, late on the 5th ($25) and really late on the 10th ($50).
The snow removal is probably fine, but never give a tenant a power tool or sharp object like a lawn mower. Do it yourself and use that time as the time when you walk the property and check out the basement mechanicals every week. No matter how many properties I buy, I think I will always mow the lawn. This also lets your tenants know that you arnt made of money and you are a hard worker.
- Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes15y
My company owns the property. We are a professional management company and I don't do this, "I work for the man" thing. I don't want tenants to lie to me and I set an example by telling them the truth.
I work hard and when people have a problem and ask to speak to my boss I tell them that I am the boss. People are going to try to take advantage of you no matter who they think owns the property.
I am involved in almost all calls for service and can be seen working on my properties 7 days a week along with my crews. If you show people that you take their home seriously and you work hard they might think twice before they screw you.
I try to know most of my tenants names and also try to remember a fact about them so I am able to have a personal conversation with them. People like these touches. I strive to live up for my company motto. "Home is in the details."
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